Opportunities for diversification in the SMSF industry

Smart practice

Tuesday 01 July 2014

As a whole, the self managed super fund (SMSF) services industry offers an impressive range of services to SMSF clients, embracing every aspect of fund set-up, administration and investment.

Despite the variety of services on offer across the SMSF industry, few businesses cover the full spectrum of service areas, suggesting there are still opportunities for diversification, partnerships, networking and growth.

On average, each practice offers 4.8 different service areas, drawing on a highly diversified revenue stream. While accounting and financial planning services are by far the most important revenue earners, making up around half of all revenues across the industry, businesses also derive significant revenues from SMSF administration, share trading, life insurance, business advisory services, estate planning and even legal advice.

In contrast, most businesses feature strategic SMSF advice as a core offering and a significant source of revenue, including 55% of currently unlicensed businesses. For those businesses, for example accounting practices, the licensing issue is likely to become increasingly urgent.

It also appears that firms turn to outsourcing in order to provide a more complete service to their clients, rather than as a source of additional revenue, suggesting that there are significant opportunities to grow profits by bringing services in-house or formalising referral relationships. The industry is characterised by a complex web of referral relationships, with businesses routinely relying on an enormous variety of specialised referral partners.

For more details on what is happening in this rapidly changing industry and how you can apply the findings to your own business, contact a Business Development Manager or download the full report

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